Public bug reported:

Binary package hint: cryptsetup

cryptsetup 1.0.3-3ubuntu3
distro: edgy

After an update to Edgy my encrypted /var partition can't be mounted at
startup. The cryptsetup command fails with an error message "Error
reading password" or similar (I can't remember the exact wording). It
seems like it can't grab a password prompt from the tty. It might be
related with the new upstart system.

** Affects: cryptsetup (Ubuntu)
     Importance: Undecided
         Status: Unconfirmed

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cryptsetup fails to read password from console at boot time
https://launchpad.net/bugs/67570

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